Dubbing it "suburban cellulite", the clusters of towers were designed to give maximum patronage to private railways and retailers, but are now being regretted by Chinese planners, says Guy Perry of construction firm AECOM.

"People are not happy there," he says.

The global firm's executive director of building and places for the Asia Pacific, Mr Perry lives in Hong Kong. He says cities such as Paris would be a better model for Sydney's growth.

Hong Kong's private metro operator, MTR, is also a property developer, and funds the railway by building 50-storey apartments and shopping malls over and around its stations. The model is called "value capture".

MTR will operate Sydney's Metro Northwest private rail line when it opens. The Baird government is considering using "value capture" to fund the metro's southern extension.

Mr Perry says although the Hong Kong model made economic sense, it was "something to be really careful about".

Urban development needed to be more than "just points along a rail line".

"The new cities [MTR] created around the metro stations are so oriented to create value for themselves at the expense of creating a more general fabric to the city ... They are set up almost as fortresses," he said.

Pedestrian bridges across roads were positioned to "make it really hard for the residents to shop anywhere else". This also prevented children from visiting friends who lived 50 metres away. Token schools were five-times oversubscribed, he said.

"Its a tempting path. They are going to come with a wall of money, to be able to do these things. But in the long term you are not going to want that kind of urban environment," said Mr Perry, who was in Sydney to speak at an Urban Development Institute of Australia conference.

Chinese investors buy a quarter of new homes in Sydney. At least eight major Chinese property developers have recently invested in apartment projects in the Sydney market, including the city's tallest residential tower.

MTR's contract for Metro Northwest, 36 kilometres of private railway between Rouse Hill and Chatswood, doesn't include property development rights. The contract shows the NSW Government holds the right to build apartments above eight new stations.

But the concept of allowing private companies such as MTR to develop property, in exchange for cheaper construction costs, is being examined by the Baird government.

The government plans to allow high rise within 400 metres of stations along the Metro Southwest corridor.

Transport Minister Andrew Constance said "thinking outside the box" was needed to fund infrastructure to keep pace with the growing population.

"Significant value is generated by the government's investment in new infrastructure and increased development density around it. We need to explore mechanisms which enable the government to share this value," he said.

A spokeswoman for the government urban planning agency, Urban Growth, said there were "many benefits" from building new homes around train stations.

"People can live closer to where they work and can catch public transport, which is not only good for the environment, it is less expensive for households and has good health outcomes," she said.

"It is a matter of how much density is OK, that still meets good planning and liveability outcomes. Hong Kong is a different case altogether."